114 NO114 DECEMBER • 2014 Aspects of recent developments in the Latin American and Caribbean labour markets Jürgen Weller 7 The earnings share of total income in Latin America, 1990-2010 Martín Abeles, Verónica Amarante and Daniel Vega 29 Latin America: Total factor productivity and its components Jair Andrade Araujo, Débora Gaspar Feitosa and Almir Bittencourt da Silva 51 Financial constraints on economic development: Theory and policy for developing countries Jennifer Hermann 67 CEPAL REVIEW CEPAL The impact of China’s incursion into the North American Free Trade Agreement (nafta) on intra-industry trade Jorge Alberto López A., Óscar Rodil M. and Saúl Valdez G. 83 Work, family and public policy changes in Latin America: Equity, maternalism and co-responsibility Merike Blofield and Juliana Martínez F. 101 A first approach to the impact of the real exchange rate on industrial sectors in Colombia Lya Paola Sierra and Karina Manrique L. 119 Global integration, disarticulation and competitiveness in Mexico’s electromechanical sector: A structural analysis Raúl Vázquez López 135 REVIEW Technological capacity-building in unstable settings: Manufacturing firms in Argentina and Brazil CEPAL Anabel Marín, Lilia Stubrin and María Amelia Gibbons 153 ECONOMIC Index of political instability in Brazil, 1889-2009 COMMISSION FOR Jaime Jordan Costantini and Mauricio Vaz Lobo Bittencourt 171 LATIN AMERICA AND THE CARIBBEAN ISSN 0251-2920 REVIEW ECONOMIC COMMISSION FOR LATIN AMERICA AND THE CARIBBEAN NO114 DECEMBER • 2014 Alicia Bárcena Executive Secretary Antonio Prado Deputy Executive Secretary REVIEW ECONOMIC COMMISSION FOR LATIN AMERICA AND THE CARIBBEAN Osvaldo Sunkel Chairman of the Editorial Board André Hofman Director Miguel Torres Technical Editor ISSN 0251-2920 The CEPAL Review was founded in 1976, along with the corresponding Spanish version, Revista CEPAL, and it is published three times a year by the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), which has its headquarters in Santiago, Chile. The Review, however, has full editorial independence and follows the usual academic procedures and criteria, including the review of articles by independent external referees. The purpose of the Review is to contribute to the discussion of socioeconomic development issues in the region by offering analytical and policy approaches and articles by economists and other social scientists working both within and outside the United Nations. The Review is distributed to universities, research institutes and other international organizations, as well as to individual subscribers. The opinions expressed in the signed articles are those of the authors and do not necessarily reflect the views of ECLAC. 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ARTICLES Aspects of recent developments in the Latin American and Caribbean labour markets 7 Jürgen Weller The earnings share of total income in Latin America, 1990-2010 29 Martín Abeles, Verónica Amarante and Daniel Vega Latin America: Total factor productivity and its components 51 Jair Andrade Araujo, Débora Gaspar Feitosa and Almir Bittencourt da Silva Financial constraints on economic development: Theory and policy for developing countries 67 Jennifer Hermann The impact of China’s incursion into the North American Free Trade Agreement (NAFTA) on intra-industry trade 83 Jorge Alberto López A., Óscar Rodil M. and Saúl Valdez G. Work, family and public policy changes in Latin America: Equity, maternalism and co-responsibility 101 Merike Blofield and Juliana Martínez F. A first approach to the impact of the real exchange rate on industrial sectors in Colombia 119 Lya Paola Sierra and Karina Manrique L. Global integration, disarticulation and competitiveness in Mexico’s electromechanical sector: A structural analysis 135 Raúl Vázquez López Technological capacity-building in unstable settings: Manufacturing firms in Argentina and Brazil 153 Anabel Marín, Lilia Stubrin and María Amelia Gibbons Index of political instability in Brazil, 1889-2009 171 Jaime Jordan Costantini and Mauricio Vaz Lobo Bittencourt CEPAL Review referees 2013 and January-August 2014 191 Guidelines for contributors to the CEPAL Review 193 Explanatory notes The following symbols are used in tables in the Review: … Three dots indicate that data are not available or are not separately reported. (–) A dash indicates that the amount is nil or negligible. A blank space in a table means that the item in question is not applicable. (-) A minus sign indicates a deficit or decrease, unless otherwise specified. (.) A point is used to indicate decimals. (/) A slash indicates a crop year or fiscal year; e.g., 2006/2007. (-) Use of a hyphen between years (e.g., 2006-2007) indicates reference to the complete period considered, including the beginning and end years. The word “tons” means metric tons and the word “dollars” means United States dollars, unless otherwise stated. References to annual rates of growth or variation signify compound annual rates. Individual figures and percentages in tables do not necessarily add up to the corresponding totals because of rounding. Aspects of recent developments in the Latin American and Caribbean labour markets Jürgen Weller ABSTRACT This article presents three stylized facts that characterized the evolution of labour markets in Latin America and the Caribbean in the period 2003-2012 and represented breaks from previous trends. It is argued that these changes have to do with the economic and production context and the political and institutional framework. We show how the magnitude and patterns of economic growth impact on the nature of job creation, especially on shifts within and between economic sectors and the various segments of different productivity levels. We emphasize how changes in labour institutions have contributed to the evolution of labour indicators and, lastly, look at recent advances and persistent weaknesses in labour performance, as well as a number of risks to the continuity of recent favourable labour trends. KEYWORDS Employment, labour market, economic growth, employment creation, unemployment, labour productivity, income, employment statistics, Latin America, Caribbean region JEL CLASSIFICATION J21, J46, J88 AUTHOR Jürgen Weller is Chief of the Employment Studies Unit of the Economic Development Division of the Economic Commission for Latin America and the Caribbean (eclac). [email protected] 8 CEPAL REVIEW 114 • DECEMBER 2014 I Introduction In the first decade of the 2000s, labour performance in the economic-industrial and political-institutional diverged markedly from the previous two decades in setting. Section II sets forth some stylized facts with Latin America and the Caribbean. Especially from regard to labour in the recent period, and contrasts 2003 onwards, there was a break from several previous them with previous performance. Section III presents trends: the unemployment rate came down, many a scheme developed to analyse the factors determining employment quality indicators improved amid increasing these changes, justifying the emphasis on the economic- job formalization, and wage gaps between skilled and industrial and political-institutional context. Section unskilled workers narrowed. These factors helped to IV examines the characteristics of these factors in the reduce poverty rates and inequality between households decade 2003-2012, furthering understanding of recent in this period. developments in the labour market. Here, we show This favourable picture may be attributed in part that the relatively high economic growth in recent times to a number of factors that weighed in to one extent was the main factor driving job creation and bringing or another in the countries of the region, especially down the regional unemployment rate. A modest rise economic and production factors and political-institutional in labour productivity, thanks to several processes, developments. facilitated gains in employment quality, as did strong The analysis in this article centres on the 10-year labour demand, which led to many of the new jobs being period beginning in 2003, looking at how